Sam Bankman-Fried, the 32-year-old co-founder of the failed crypto exchange FTX, has been sentenced after a more than one year trial to 25 years in prison for defrauding customers and investors of his now-bankrupt firm. Before the indictment he was a billionaire, who emerged as a high-profile champion of crypto. FTX dramatically collapsed in 2022.
He was convicted by a New York jury last year on charges including wire fraud and conspiracy to commit money laundering, after a trial that detailed how he had taken more than $8bn (£6.3bn) from customers, and used the money to buy property, make political donations and put toward other investments.
Bankman-Fried showed little visible reaction to the ruling but admitted to mistakes of mismanagement, maintaining that he was acting in good faith. disappointing not only customers but also former employees, including top lieutenants Caroline Ellison and Gary Wang, formerly close friends who testified against him at trial and whom he praised in his remarks.
FTX was one of the world’s largest crypto exchanges before its demise, turning Bankman-Fried into a business celebrity and attracting millions of customers who used the platform to buy and trade cryptocurrency. Rumours of financial trouble sparked a run-on deposit in 2022, precipitating the firm’s implosion and exposing Bankman-Fried’s crimes. Judge Lewis Kaplan, while delivering the sentence said that Bankerman lied during his testimony at trial and made protestations of sorrow” about customer losses, despite not ever uttering ” a word of remorse for the commission of terrible crimes”.
The victims want their money back but there is no easy and clear-cut way in sight. Meanwhile, the federal government has seized some of Bankerman’s assets, such as shares he owned in Robinhood, the trading app which raised more than $600m when they were sold last year.
But he is not the first player in the industry to be sentenced. Karl Sebastian Greenwood, who worked with “Cryptoqueen” Ruja Ignatova, was sentenced to 20 years in prison last year for his role convincing millions of people to invest more than $4bn in a fraudulent currency, OneCoin. His case also drew comparisons to Bernie Madoff, who was setenced to 150 years in prison after being found guilty of a $64bn Ponzi scheme.